Maryland’s Joint Enforcement Task Force on Workplace Fraud has released its latest annual report, highlighting the widespread issue of worker misclassification across the state. The findings reveal that in 2024, more than 5,500 workers were misclassified, denying them access to unemployment benefits, workers’ compensation, health insurance, minimum wage, and overtime pay. Additionally, audits uncovered over $36 million in unreported taxable wages.
The report examines how misclassification affects both employees and businesses, showing that companies that follow labor laws face unfair competition from those that reduce costs by improperly classifying workers. When employers misclassify employees as independent contractors, they shift financial burdens to workers, taxpayers, and the state. This practice results in unpaid taxes, reducing state revenue and limiting funding for essential public services.
Maryland Attorney General Anthony Brown emphasized the broad impact of workplace fraud, stating that when workers are not paid what they are owed or provided with the benefits they deserve, it affects not just the individuals but also businesses that comply with labor laws and the state as a whole.
Maryland Secretary of Labor and Task Force Chair Portia Wu underscored the economic consequences of worker misclassification, noting that fraudulent labor practices hinder the creation of quality jobs and limit opportunities for the middle class. She emphasized that enforcement efforts are essential to ensuring fair wages and economic stability for all Marylanders.
The report was compiled by the Joint Enforcement Task Force on Workplace Fraud, a nine-member group restarted by Governor Wes Moore in January 2024. The task force, chaired by Secretary Wu, includes Attorney General Brown and Comptroller Brooke E. Lierman. Through coordinated data sharing and enforcement actions, the task force seeks to hold employers accountable and strengthen worker protections.
Comptroller Lierman described the rate of worker misclassification as alarming, reiterating her commitment to enforcing labor laws and supporting ethical business practices. She stated that the Office of the Comptroller will continue to work with other agencies, unions, and advocates to pursue companies that violate labor laws, ensuring workers receive the wages and benefits they are owed.
The full report is available on the Maryland Department of Labor website. Workers who suspect they have been misclassified can contact the Division of Labor & Industry at workrights@maryland.gov for assistance. Employers found guilty of workplace fraud may face investigations, citations, and legal obligations, including payment of back wages, taxes, and unemployment insurance contributions.
